UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2015
MONSTER WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
|
| | | | |
| | | | | |
| | Delaware | 001-34209 | 13-3906555 |
| | (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| |
| | |
| | 133 Boston Post Road, Building 15 Weston, Massachusetts | 02493 | |
| |
| | (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (978) 461-8000
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
|
| |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On October 29, 2015, Monster Worldwide, Inc. (the “Company”) announced its results of operations for the quarter and nine months ended September 30, 2015. A copy of the Company’s press release announcing its results of operations for the quarter and nine months ended September 30, 2015 is attached hereto as Exhibit 99.1. A copy of the supplemental financial information issued by the Company in connection with the press release is attached hereto as Exhibit 99.2.
The information in this report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
|
| | | |
99.1 |
| | Press Release of the Company Issued on October 29, 2015 Reporting the Company’s Results for the Quarter and Nine Months Ended September 30, 2015. |
99.2 |
| | Supplemental Financial Information. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| | |
| | |
| MONSTER WORLDWIDE, INC. |
| (Registrant) |
| | |
| By: | /s/ James M. Langrock |
| Name: | James M. Langrock |
| Title: | Executive Vice President and Chief Financial Officer |
Date: October 29, 2015
EXHIBIT INDEX
|
| | |
| | |
Exhibit Number | | Description |
| | |
99.1 | | Press Release of the Company Issued on October 29, 2015 Reporting the Company’s Results for the Quarter and Nine Months Ended September 30, 2015. |
| | |
99.2 | | Supplemental Financial Information. |
Exhibit 99.1
Monster Worldwide Reports Third Quarter 2015 Results
| |
• | Third Quarter Financial Highlights: |
| |
◦ | Company Exceeds Expectations on All Profitability Metrics For the 5th Consecutive Quarter |
| |
▪ | Adjusted EBITDA Including Korea of $32.4 Million Increases 40% Year over Year and 12% Sequentially; Adjusted EBITDA from Continuing Operations of $28.1 Million Increases 45% Year over Year and 9% Sequentially |
| |
▪ | Adjusted EBITDA Margin Including Korea Expands to 18% from 16.1% in Q2 2015; Adjusted EBITDA Margin from Continuing Operations Expands to 16.8% from 15.3% |
| |
▪ | Non-GAAP EPS Including Korea of $0.12; Non-GAAP EPS from Continuing Operations of $0.11; GAAP EPS from Continuing Operations of $0.10 |
| |
◦ | Revenue of $167.1 Million Flat Sequentially and Down 3% Year over Year at Constant Currency |
| |
◦ | Cash Flow From Operations of $12.3 Million |
| |
◦ | Improves Financial Flexibility With Sale of Remaining Ownership Stake in South Korean Business for Approximately $85 Million |
| |
◦ | Announces Authorization of $75 Million Share Repurchase Plan |
Weston, MA, October 29, 2015 -- Monster Worldwide, Inc. (NYSE:MWW) today reported financial results for the third quarter and nine months ended September 30, 2015. Third quarter 2015 financial results reflect the completion of the Company’s remaining ownership stake in JobKorea, the Company’s South Korean operations, which were classified as a discontinued operation.
“We are gratified that we achieved our 18-22% EBITDA margin goal a full quarter earlier than expected and adjusted EPS were at the high end of our guidance range,” said Tim Yates, Chief Executive Officer. “Our new product strategy continued to gain traction with wider customer acceptance on a global basis. Revenue was essentially flat as stronger than anticipated results from Europe were offset by weaker than expected results in North America. We are extremely confident of Monster’s ability to drive increased revenue and improving EBITDA margins going forward. As a sign of this confidence and our improved liquidity position as a result of the monetization of JobKorea, we are pleased to announce that our Board has authorized a $75 million buyback which we anticipate implementing as we generate free cash flow in the quarters ahead, beginning in the fourth quarter of 2015.”
Third Quarter 2015 Results
Revenue from continuing operations of $167 million decreased 3% at constant currency compared to last year’s third quarter and decreased 7% at actual rates. Revenue from the Company’s Careers - North America operations decreased 4% year over year. Revenue from Careers - International was essentially flat year over year at constant currency and decreased 13% at actual rates. As of the first quarter of 2015, Internet Advertising & Fees revenue and operating results are being reported within the Careers - North America segment. Historical quarterly revenue data is available in the Company’s supplemental financial information.
Total GAAP operating expenses from continuing operations decreased to $156 million compared to $180 million in the third quarter of 2014. Net income from continuing operations for the third quarter of 2015 was $10 million, or $0.11 per share, compared to a loss from continuing operations of $3 million, or $0.03 per share in the third quarter of 2014.
Non-GAAP net income from continuing operations was $10 million, or $0.11 per share, compared to $4 million, or $0.04 per share in the third quarter of 2014. Non-GAAP operating expenses of $150 million decreased 13% year over year. Adjusted EBITDA margin of 16.8% was led by Careers - North America with a 29% margin. Pro-forma items are described in the "Notes Regarding the Use of Non-GAAP Financial Measures" and are reconciled to the GAAP measure in the accompanying tables.
Net cash provided by operating activities in the quarter was $12 million and free cash flow was $5 million. Deferred revenue of our continuing operations declined sequentially to $251 million or 10% compared to $278 million as of June 30, 2015. The Company ended the third quarter with total available liquidity of approximately $157 million.
Third quarter 2015 financial results were impacted by the sale of JobKorea, which was classified as a discontinued operation for accounting purposes. Including the Korean operations, Monster had Non-GAAP earnings per share of $0.12 and adjusted EBITDA of $32.4 million, or an 18% margin, representing an Adjusted EBITDA increase of 12% sequentially and 40% year over year. The Adjusted EBITDA margin of 18% met the Company’s prior guidance of exiting 2015 with an EBITDA margin of between 18%-22%.
Nine Month Results
Monster Worldwide reported total revenue from continuing operations of $508 million for the first nine months ended September 30, 2015 compared to $550 million in the same period last year, a 3% decrease on a constant currency basis and 8% at actual rates. Net income from continuing operations was $15 million, or $0.16 per share, compared to a loss of $3 million, or $0.03 per share, in 2014.
Share Repurchase Program
The Company’s Board of Directors has authorized a $75 million share repurchase program over a period of 24 months. The Company intends to repurchase shares under the new authorization as a percentage of future generated free cash flow, which can be adjusted periodically.
Reallocate to Accelerate
On February 10, 2015, the Company committed to implement a series of cost savings initiatives to reduce costs globally while continuing to support the Company’s new strategy. The initiatives include a global workforce reduction of approximately 300 associates, lease exit costs, impairment of certain assets, and office and general expense controls. Through September 30, 2015, the Company has incurred $29 million of charges relating to this program. These charges have been excluded from the Company’s Non-GAAP financial statements for the three and nine months ended September 30, 2015. The Company anticipates additional charges of approximately $1 million to $2 million in the fourth quarter of 2015 in connection with this program.
Guidance
The fourth quarter guidance includes the impact of the JobKorea transaction. Fourth quarter 2015 Non-GAAP EPS from continuing operations is expected to be in the range of $0.10 to $0.14, which excludes $2 million to $3 million of stock-based compensation, $1.2 million of non-cash debt discount amortization related to the convertible debt and restructuring charges related to the Reallocate to Accelerate program.
Historical data on Non-GAAP EPS is available in the Company’s supplemental financial information.
Conference Call and Webcast
Third quarter 2015 results will be discussed on Monster Worldwide’s quarterly conference call on October 29, 2015 at 8:30 AM ET. A live webcast of the conference call can be accessed online through the Investor Relations section of the Company’s website at http://ir.monster.com. To join the conference call by telephone, please dial (888) 317-6003 or (412) 317-6061 and reference conference ID# 3463829. A presentation of financial slides will be referenced during the conference call and will be viewable through the live webcast. A PDF of the financial presentation can also be accessed directly through the Company’s Investor Relations website at http://ir.monster.com.
The Company has also made available certain supplemental financial information which can be accessed directly through the Company’s Investor Relations website at http://ir.monster.com.
For a replay of the conference call, please dial (877) 344-7529 or (412) 317-0088 and reference ID# 10074711. This number is valid until midnight on November 5, 2015.
Contacts
| |
Investors: | Mike McGuinness, (212) 351-7110, michael.mcguinness@monster.com |
| |
Media: | Matt Anchin, (212) 351-7528, matt.anchin@monster.com |
About Monster Worldwide
Monster Worldwide, Inc. (NYSE: MWW) is a global leader in connecting people to jobs, wherever they are. For more than 20 years, Monster has helped people improve their lives with better jobs, and employers find the best talent. Today, the company offers services in more than 40 countries, providing some of the broadest, most sophisticated job seeking, career management, recruitment and talent management capabilities. Monster continues its pioneering work of transforming the recruiting industry with advanced technology using intelligent digital, social and mobile solutions, including our flagship website monster.com® and a vast array of products and services. For more information visit
http://monster.com/about.
Special Note: The statements in this release that are not strictly historical, including, without limitation, statements regarding the Company’s strategic direction, prospects and future results, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve certain risks and uncertainties and, therefore, actual results may differ materially from what is expressed or implied herein and no assurance can be given that the Company will achieve, among other things, its outlook with respect to earnings per share for the fourth quarter 2015. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, economic and other conditions in the markets in which we operate, risks associated with acquisitions or dispositions, competition, and the other risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this release by reference. Many of the factors that will determine the Company’s future results are beyond the ability of management to control or predict. Readers should not place
undue reliance on the forward-looking statements in this release as they reflect management’s views only as of the date hereof. The Company undertakes no obligation to revise or update any of the forward-looking statements contained in this release or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
Notes Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain Non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles (“GAAP”) and may be different from Non-GAAP measures reported by other companies. The Company believes that its presentation of Non-GAAP measures provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations.
Non-GAAP revenue, operating expenses, operating income, operating margin, income from continuing operations, income from discontinued operations, net of tax, net income and diluted earnings per share attributable to Monster Worldwide, Inc. all exclude certain pro-forma items including: non-cash stock based compensation expense; costs incurred in connection with the Company’s restructuring programs; separation charges associated with the resignation of the Company’s former Chief Executive Officer; non-cash impairment charges; amortization of the debt discount and deferred financing costs associated with our 3.50% convertible senior notes due 2019; write-off of deferred financing costs relating to our former credit facility, amended in October 2014; income tax benefits associated with the reversal of income tax reserves on uncertain tax positions and a tax benefit related to certain losses arising from the Company’s restructuring programs; income tax provisions for increased valuation allowances on deferred tax assets; gain on deconsolidation of subsidiaries and tax provisions thereon; the results of our South Korean subsidiary as it has been classified as discontinued operations; gain on partial sale of an equity method investment and tax provisions thereon; and charges related to exited facilities.
In the first quarter of the calendar year 2015, the Company began to utilize a fixed long-term projected Non-GAAP tax rate for reporting operating results and for planning, forecasting, and analyzing future periods. This change provides better consistency across the interim reporting periods by eliminating the effects of non-recurring and period-specific items. When projecting this long-term rate, the Company evaluated a five-year financial projection comprising the current and the next four years that exclude the income tax effects of the Non-GAAP pre-tax items described above, eliminates the effects of non-recurring and period specific items which can vary in size and frequency, and is reflective of the anticipated future geographic mix of income among tax jurisdictions. The projected rate also assumes no new acquisitions or disposals in the five-year period, eliminates the effect of tax valuation allowances, and takes into account other factors including the Company’s current tax structure, its existing tax positions in various jurisdictions and key legislation in major jurisdictions where the Company operates. The Non-GAAP tax rate is 35%. The Company intends to re-evaluate this long-term rate on an annual basis or if any significant events that may materially affect this long-term rate occur. This long-term rate could be subject to change for a variety of reasons, which may include (but are not limited to) for example, significant changes in the geographic earnings mix including future acquisition or disposition activity, having less income than anticipated, or fundamental tax law changes in major jurisdictions where the Company operates.
Non-GAAP diluted shares includes the impact, based on the average share price for the period, of the Company’s outstanding capped call transactions, which are anti-dilutive in GAAP earnings per share,
but are expected to mitigate the dilutive effect of the Company’s 3.50% convertible senior notes due 2019.
The Company uses these Non-GAAP measures for reviewing the ongoing results of the Company’s core business operations and in certain instances, for measuring performance under certain of the Company’s incentive compensation plans. These Non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is defined as operating income or loss before depreciation and amortization, non-cash compensation expense, non-cash impairment charges, and non-cash costs incurred in connection with the Company’s restructuring programs. Adjusted EBITDA excludes the impact of the pro-forma items discussed above. The Company considers EBITDA and Adjusted EBITDA to be important indicators of its operational strength which the Company believes are useful to management and investors in evaluating its operating performance. EBITDA and Adjusted EBITDA are Non-GAAP measures and may not be comparable to similarly titled measures reported by other companies.
Free cash flow is defined as cash flows from operating activities less capital expenditures. Free cash flow is considered a liquidity measure and provides useful information about the Company’s ability to generate cash after investments in property and equipment. Free cash flow reflected herein is a Non-GAAP measure and may not be comparable to similarly titled measures reported by other companies. Free cash flow does not reflect the total change in the Company’s cash position for the period and should not be considered a substitute for such a measure.
Net cash is defined as cash and cash equivalents plus short-term and long-term marketable securities, less total debt. Total available liquidity is defined as cash and cash equivalents, plus short-term and long-term marketable securities, plus unused borrowings under our credit facility. The Company considers net cash and total available liquidity to be important measures of liquidity and indicators of its ability to meet its ongoing obligations. The Company also uses net cash and total available liquidity, among other measures, in evaluating its choices for capital deployment. Net cash and total available liquidity are presented herein as Non-GAAP measures and may not be comparable to similarly titled measures used by other companies.
MONSTER WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Revenue | $ | 167,082 |
| | $ | 179,591 |
| | $ | 507,694 |
| | $ | 550,257 |
|
Salaries and related | 79,787 |
| | 95,800 |
| | 254,500 |
| | 291,868 |
|
Office and general | 43,638 |
| | 50,376 |
| | 131,430 |
| | 152,196 |
|
Marketing and promotion | 30,044 |
| | 33,383 |
| | 91,091 |
| | 108,508 |
|
Restructuring and other special charges | 2,780 |
| | — |
| | 28,787 |
| | — |
|
Total operating expenses | 156,249 |
| | 179,559 |
| | 505,808 |
| | 552,572 |
|
Operating income (loss) | 10,833 |
| | 32 |
| | 1,886 |
| | (2,315 | ) |
Gain on partial sale of equity method investment | — |
| | — |
| | 8,849 |
| | — |
|
Gain on deconsolidation of subsidiaries, net | — |
| | — |
| | — |
| | 11,828 |
|
Interest and other, net | (3,674 | ) | | (1,930 | ) | | (10,289 | ) | | (5,123 | ) |
Income (loss) before income taxes and income in equity interests | 7,159 |
| | (1,898 | ) | | 446 |
| | 4,390 |
|
(Benefit from) provision for income taxes | (2,361 | ) | | 841 |
| | (14,487 | ) | | 6,915 |
|
Income in equity interests, net | 249 |
| | 75 |
| | 321 |
| | — |
|
Income (loss) from continuing operations | 9,769 |
| | (2,664 | ) | | 15,254 |
| | (2,525 | ) |
Income from discontinued operations, net of tax | 2,163 |
| | 2,313 |
| | 6,005 |
| | 6,909 |
|
Net income (loss) | 11,932 |
| | (351 | ) | | 21,259 |
| | 4,384 |
|
Net income attributable to noncontrolling interest | (1,512 | ) | | (1,318 | ) | | (3,712 | ) | | (3,954 | ) |
Net income (loss) attributable to Monster Worldwide, Inc. | $ | 10,420 |
| | $ | (1,669 | ) | | $ | 17,547 |
| | $ | 430 |
|
| | | | | | | |
*Basic earnings (loss) per share attributable to Monster Worldwide, Inc.: | | | | | | | |
Income (loss) from continuing operations | $ | 0.11 |
| | $ | (0.03 | ) | | $ | 0.17 |
| | $ | (0.03 | ) |
Income from discontinued operations, net of tax | 0.01 |
| | 0.01 |
| | 0.03 |
| | 0.03 |
|
Basic earnings (loss) per share attributable to Monster Worldwide, Inc. | $ | 0.12 |
| | $ | (0.02 | ) | | $ | 0.20 |
| | $ | — |
|
| | | | | | | |
*Diluted earnings (loss) per share attributable to Monster Worldwide, Inc.: | | | | | | | |
Income (loss) from continuing operations | $ | 0.10 |
| | $ | (0.03 | ) | | $ | 0.16 |
| | $ | (0.03 | ) |
Income from discontinued operations, net of tax | 0.01 |
| | 0.01 |
| | 0.02 |
| | 0.03 |
|
Diluted earnings (loss) per share attributable to Monster Worldwide, Inc. | $ | 0.11 |
| | $ | (0.02 | ) | | $ | 0.19 |
| | $ | — |
|
| | | | | | | |
Weighted average shares outstanding: | | | | | | | |
Basic | 90,340 |
| | 86,576 |
| | 89,853 |
| | 88,236 |
|
Diluted | 96,839 |
| | 86,576 |
| | 94,573 |
| | 88,236 |
|
| | | | | | | |
Reconciliation of EBITDA to Adjusted EBITDA | | | | | | | |
Operating income (loss) | $ | 10,833 |
| | $ | 32 |
| | $ | 1,886 |
| | $ | (2,315 | ) |
Depreciation and amortization of intangibles | 11,086 |
| | 11,859 |
| | 33,685 |
| | 35,542 |
|
Stock-based compensation | 3,368 |
| | 6,612 |
| | 11,386 |
| | 23,548 |
|
Restructuring non-cash charges | — |
| | — |
| | 4,226 |
| | — |
|
EBITDA | $ | 25,287 |
| | $ | 18,503 |
| | $ | 51,183 |
| | $ | 56,775 |
|
Separation costs | — |
| | — |
| | 2,000 |
| | — |
|
Facilities costs | — |
| | 880 |
| | — |
| | 7,229 |
|
Restructuring and other special charges, less non-cash items | 2,780 |
| | — |
| | 24,561 |
| | — |
|
Adjusted EBITDA | $ | 28,067 |
| | $ | 19,383 |
| | $ | 77,744 |
| | $ | 64,004 |
|
*Earnings per share may not add in certain periods due to rounding. | | | | | | | |
MONSTER WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2015 | | 2014 | | 2015 | | 2014 |
Cash flows provided by operating activities: | | | | | | | |
Net income (loss) | $ | 11,932 |
| | $ | (351 | ) | | $ | 21,259 |
| | $ | 4,384 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization | 11,388 |
| | 12,194 |
| | 34,625 |
| | 36,548 |
|
Provision for doubtful accounts | 478 |
| | 562 |
| | 1,239 |
| | 1,290 |
|
Stock-based compensation | 3,380 |
| | 6,682 |
| | 11,471 |
| | 23,918 |
|
Deferred income taxes | (3,218 | ) | | 53 |
| | 1,487 |
| | 3,455 |
|
Non-cash restructuring charges | — |
| | — |
| | 4,226 |
| | — |
|
Income in equity interests, net | (249 | ) | | (75 | ) | | (321 | ) | | — |
|
Gain on deconsolidation of subsidiaries | — |
| | — |
| | — |
| | (13,647 | ) |
Amount reclassified from accumulated other comprehensive income | — |
| | — |
| | — |
| | 1,819 |
|
Gain on partial sale of equity method investment | — |
| | — |
| | (8,849 | ) | | — |
|
Excess income tax benefit from equity compensation plans | — |
| | — |
| | — |
| | (199 | ) |
Changes in assets and liabilities, net of acquisitions: | | | | | | | |
Accounts receivable | 19,260 |
| | 25,832 |
| | 40,238 |
| | 65,356 |
|
Prepaid and other | 5,658 |
| | (2,855 | ) | | 9,779 |
| | (10,845 | ) |
Deferred revenue | (24,936 | ) | | (29,483 | ) | | (39,117 | ) | | (56,972 | ) |
Accounts payable, accrued liabilities and other | (11,410 | ) | | (622 | ) | | (20,947 | ) | | 637 |
|
Total adjustments | 351 |
| | 12,288 |
| | 33,831 |
| | 51,360 |
|
Net cash provided by operating activities | 12,283 |
| | 11,937 |
| | 55,090 |
| | 55,744 |
|
Cash flows used for investing activities: | | | | | | | |
Capital expenditures | (6,869 | ) | | (8,287 | ) | | (21,604 | ) | | (30,756 | ) |
Payments for acquisitions, net of cash acquired | — |
| | — |
| | — |
| | (27,005 | ) |
Investment in Alma Career Oy | — |
| | — |
| | — |
| | (6,516 | ) |
Cash funded to equity investee and other | — |
| | (606 | ) | | 1,648 |
| | (1,222 | ) |
Capitalized patent defense costs | — |
| | (1,742 | ) | | (2,305 | ) | | (2,962 | ) |
Cash received from partial sale of equity investment | — |
| | — |
| | 9,128 |
| | — |
|
Net cash used for investing activities | (6,869 | ) | | (10,635 | ) | | (13,133 | ) | | (68,461 | ) |
Cash flows (used for) provided by financing activities: | | | | | | | |
Proceeds from borrowings on credit facilities | — |
| | 1,500 |
| | 32,100 |
| | 80,300 |
|
Payments on borrowings on credit facilities | — |
| | — |
| | (32,100 | ) | | (8,100 | ) |
Payments on borrowings on term loan | (9,250 | ) | | (2,500 | ) | | (13,750 | ) | | (6,875 | ) |
Fees paid on the issuance of debt and purchase of capped call | — |
| | — |
| | (1,110 | ) | | — |
|
Repurchase of common stock | — |
| | (553 | ) | | — |
| | (52,070 | ) |
Tax withholdings related to net share settlements of restricted stock awards and units | (1,239 | ) | | (1,307 | ) | | (8,039 | ) | | (5,014 | ) |
Excess income tax benefit from equity compensation plans | — |
| | — |
| | — |
| | 199 |
|
Distribution paid to minority holder | — |
| | — |
| | (10,018 | ) | | (3,021 | ) |
Net cash (used for) provided by financing activities | (10,489 | ) | | (2,860 | ) | | (32,917 | ) | | 5,419 |
|
Effects of exchange rates on cash | (2,683 | ) | | (2,461 | ) | | (3,414 | ) | | (907 | ) |
Net (decrease) increase in cash and cash equivalents | $ | (7,758 | ) | | $ | (4,019 | ) | | $ | 5,626 |
| | $ | (8,205 | ) |
Cash and cash equivalents from continuing operations, beginning of period | $ | 99,415 |
| | $ | 66,472 |
| | $ | 72,030 |
| | $ | 70,066 |
|
Cash and cash equivalents from discontinued operations, beginning of period | 8,266 |
| | 17,923 |
| | 22,267 |
| | 18,515 |
|
Cash and cash equivalents, beginning of period | $ | 107,681 |
| | $ | 84,395 |
| | $ | 94,297 |
| | $ | 88,581 |
|
Cash and cash equivalents from continuing operations, end of period | $ | 88,389 |
| | $ | 61,399 |
| | $ | 88,389 |
| | $ | 61,399 |
|
Cash and cash equivalents from discontinued operations, end of period | 11,534 |
| | 18,977 |
| | 11,534 |
| | 18,977 |
|
Cash and cash equivalents, end of period | $ | 99,923 |
| | $ | 80,376 |
| | $ | 99,923 |
| | $ | 80,376 |
|
| | | | | | | |
Free cash flow: | | | | | | | |
Net cash provided by operating activities of continuing operations | $ | 8,370 |
| | $ | 10,289 |
| | $ | 44,943 |
| | $ | 48,692 |
|
Net cash provided by operating activities of discontinued operations | 3,913 |
| | 1,648 |
| | 10,147 |
| | 7,052 |
|
Less: Capital expenditures | (6,869 | ) | | (8,287 | ) | | (21,604 | ) | | (30,756 | ) |
Free cash flow | $ | 5,414 |
| | $ | 3,650 |
| | $ | 33,486 |
| | $ | 24,988 |
|
MONSTER WORLDWIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
|
| | | | | | | |
| September 30, 2015 | | December 31, 2014 |
Assets: | | | |
| | | |
Cash and cash equivalents | $ | 88,389 |
| | $ | 72,030 |
|
Accounts receivable, net | 231,192 |
| | 279,569 |
|
Property and equipment, net | 107,288 |
| | 117,191 |
|
Goodwill and intangibles, net | 525,850 |
| | 531,195 |
|
Investment in unconsolidated affiliates | 18,955 |
| | 20,700 |
|
Other assets | 103,770 |
| | 125,448 |
|
Assets held for sale | 56,772 |
| | 71,018 |
|
Total Assets | $ | 1,132,216 |
| | $ | 1,217,151 |
|
| | | |
Liabilities and Stockholders' Equity: | | | |
| | | |
Accounts payable, accrued expenses and other current liabilities | $ | 140,136 |
| | $ | 154,103 |
|
Deferred revenue | 251,065 |
| | 297,636 |
|
Current portion of long-term debt | 10,278 |
| | 9,563 |
|
Long-term income taxes payable | 35,561 |
| | 54,636 |
|
Long-term debt, net, less current portion | 190,494 |
| | 201,821 |
|
Other long-term liabilities | 17,041 |
| | 16,635 |
|
Liabilities held for sale | 10,100 |
| | 8,012 |
|
Total Liabilities | $ | 654,675 |
| | $ | 742,406 |
|
| | | |
Stockholders' Equity | 477,541 |
| | 474,745 |
|
Total Liabilities and Stockholders' Equity | $ | 1,132,216 |
| | $ | 1,217,151 |
|
MONSTER WORLDWIDE, INC.
UNAUDITED NON-GAAP STATEMENTS OF OPERATIONS AND RECONCILIATIONS
(in thousands, except per share amounts)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2015 | | Three Months Ended September 30, 2014 |
| As Reported | | Non GAAP Adjustments | | Consolidated Non GAAP | | As Reported | | Non GAAP Adjustments | | Consolidated Non GAAP |
Revenue | $ | 167,082 |
| | $ | — |
| | $ | 167,082 |
| | $ | 179,591 |
| | $ | — |
| | $ | 179,591 |
|
Salaries and related | 79,787 |
| | (3,368 | ) | a | 76,419 |
| | 95,800 |
| | (6,612 | ) | a | 89,188 |
|
Office and general | 43,638 |
| | — |
| | 43,638 |
| | 50,376 |
| | (880 | ) | c | 49,496 |
|
Marketing and promotion | 30,044 |
| | — |
| | 30,044 |
| | 33,383 |
| | — |
| | 33,383 |
|
Restructuring and other special charges | 2,780 |
| | (2,780 | ) | b | — |
| | — |
| | — |
| | — |
|
Total operating expenses | 156,249 |
| | (6,148 | ) | | 150,101 |
| | 179,559 |
| | (7,492 | ) | | 172,067 |
|
Operating income | 10,833 |
| | 6,148 |
| | 16,981 |
| | 32 |
| | 7,492 |
| | 7,524 |
|
Operating margin | 6.5 | % | | | | 10.2 | % | | — | % | | | | 4.2 | % |
Interest and other, net | (3,674 | ) | | 1,252 |
| f | (2,422 | ) | | (1,930 | ) | | — |
| | (1,930 | ) |
Income (loss) before income taxes and income in equity interests | 7,159 |
| | 7,400 |
| | 14,559 |
| | (1,898 | ) | | 7,492 |
| | 5,594 |
|
(Benefit from) provision for income taxes | (2,361 | ) | | 7,472 |
| h | 5,111 |
| | 841 |
| | 1,235 |
| h | 2,076 |
|
Income in equity interests, net | 249 |
| | — |
| | 249 |
| | 75 |
| | — |
| | 75 |
|
Income (loss) from continuing operations | 9,769 |
| | (72 | ) | | 9,697 |
| | (2,664 | ) | | 6,257 |
| | 3,593 |
|
Income from discontinued operations, net of tax | 2,163 |
| | (2,163 | ) | i | — |
| | 2,313 |
| | (2,313 | ) | i | — |
|
Net income (loss) | 11,932 |
| | (2,235 | ) | | 9,697 |
| | (351 | ) | | 3,944 |
| | 3,593 |
|
Net income attributable to noncontrolling interest | (1,512 | ) | | 1,512 |
| | — |
| | (1,318 | ) | | 1,318 |
| | — |
|
Net income (loss) attributable to Monster Worldwide, Inc. | $ | 10,420 |
| | $ | (723 | ) | | $ | 9,697 |
| | $ | (1,669 | ) | | $ | 5,262 |
| | $ | 3,593 |
|
*Diluted earnings (loss) per share attributable to Monster Worldwide, Inc.: | | | | | | | | | | | |
Income (loss) from continuing operations | $ | 0.10 |
| | $ | 0.01 |
| | $ | 0.11 |
| | $ | (0.03 | ) | | $ | 0.07 |
| | $ | 0.04 |
|
Income from discontinued operations, net of tax | 0.01 |
| | (0.01 | ) | | — |
| | 0.01 |
| | (0.01 | ) | | — |
|
Diluted earnings (loss) per share attributable to Monster Worldwide, Inc. | $ | 0.11 |
| | $ | — |
| | $ | 0.11 |
| | $ | (0.02 | ) | | $ | 0.06 |
| | $ | 0.04 |
|
Weighted average shares outstanding: | | | | | | | | | | | |
Diluted | 96,839 |
| | (5,872 | ) | j | 90,967 |
| | 86,576 |
| | 2,741 |
| k | 89,317 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2015 | | Nine Months Ended September 30, 2014 |
| As Reported | | Non GAAP Adjustments | | Consolidated Non GAAP | | As Reported | | Non GAAP Adjustments | | Consolidated Non GAAP |
Revenue | $ | 507,694 |
| | $ | — |
| | $ | 507,694 |
| | $ | 550,257 |
| | $ | — |
| | $ | 550,257 |
|
Salaries and related | 254,500 |
| | (13,385 | ) | a | 241,115 |
| | 291,868 |
| | (23,548 | ) | a | 268,320 |
|
Office and general | 131,430 |
| | — |
| | 131,430 |
| | 152,196 |
| | (7,229 | ) | c | 144,967 |
|
Marketing and promotion | 91,091 |
| | — |
| | 91,091 |
| | 108,508 |
| | — |
| | 108,508 |
|
Restructuring and other special charges | 28,787 |
| | (28,787 | ) | b | — |
| | — |
| | — |
| | — |
|
Total operating expenses | 505,808 |
| | (42,172 | ) | | 463,636 |
| | 552,572 |
| | (30,777 | ) | | 521,795 |
|
Operating income (loss) | 1,886 |
| | 42,172 |
| | 44,058 |
| | (2,315 | ) | | 30,777 |
| | 28,462 |
|
Operating margin | 0.4 | % | | | | 8.7 | % | | (0.4 | %) | | | | 5.2 | % |
Gain on partial sale of equity method investment | 8,849 |
| | (8,849 | ) | e | — |
| | — |
| | — |
| | — |
|
Gain on deconsolidation of subsidiaries, net | — |
| | — |
| | — |
| | 11,828 |
| | (11,828 | ) | d | — |
|
Interest and other, net | (10,289 | ) | | 3,789 |
| f | (6,500 | ) | | (5,123 | ) | | — |
| | (5,123 | ) |
Income before income taxes and income (loss) in equity interests | 446 |
| | 37,112 |
| | 37,558 |
| | 4,390 |
| | 18,949 |
| | 23,339 |
|
(Benefit from) provision for income taxes | (14,487 | ) | | 27,649 |
| h | 13,162 |
| | 6,915 |
| | 718 |
| g,h | 7,633 |
|
Income in equity interests, net | 321 |
| | — |
| | 321 |
| | — |
| | — |
| | — |
|
Income (loss) from continuing operations | 15,254 |
| | 9,463 |
| | 24,717 |
| | (2,525 | ) | | 18,231 |
| | 15,706 |
|
Income from discontinued operations, net of tax | 6,005 |
| | (6,005 | ) | i | — |
| | 6,909 |
| | (6,909 | ) | i | — |
|
Net income | 21,259 |
| | 3,458 |
| | 24,717 |
| | 4,384 |
| | 11,322 |
| | 15,706 |
|
Net income attributable to noncontrolling interest | (3,712 | ) | | 3,712 |
| | — |
| | (3,954 | ) | | 3,954 |
| | — |
|
Net income attributable to Monster Worldwide, Inc. | $ | 17,547 |
| | $ | 7,170 |
| | $ | 24,717 |
| | $ | 430 |
| | $ | 15,276 |
| | $ | 15,706 |
|
*Diluted earnings per share attributable to Monster Worldwide, Inc.: | | | | | | | | | | | |
Income (loss) from continuing operations | $ | 0.16 |
| | $ | 0.11 |
| | $ | 0.27 |
| | $ | (0.03 | ) | | $ | 0.20 |
| | $ | 0.17 |
|
Income from discontinued operations, net of tax | 0.02 |
| | (0.02 | ) | | — |
| | 0.03 |
| | (0.03 | ) | | — |
|
Diluted earnings per share attributable to Monster Worldwide, Inc.: | $ | 0.19 |
| | $ | 0.09 |
| | $ | 0.27 |
| | $ | — |
| | $ | 0.17 |
| | $ | 0.17 |
|
Weighted average shares outstanding: | | | | | | | | | | | |
Diluted | 94,573 |
| | (3,714 | ) | j | 90,859 |
| | 88,236 |
| | 2,999 |
| k | 91,235 |
|
*Earnings per share may not add in certain periods due to rounding.
Note Regarding Non GAAP Adjustments:
The financial information included herein contains certain non-GAAP financial measures. This information is not intended to be used in place of the financial information prepared and presented in accordance with GAAP, nor is it intended to be considered in isolation. We believe that the above presentation of non-GAAP measures provide useful information to management and investors regarding certain core operating and business trends relating to our results of operations, exclusive of certain restructuring related and other special charges.
Non GAAP adjustments consist of the following:
| |
a | Costs related to stock based compensation. Additionally, the YTD 2015 period includes $2.0 million of separation costs associated with the former CEO's resignation. |
| |
b | Restructuring related charges pertaining to the cost reduction plan announced in February 2015. |
| |
c | Charges related to exited facilities primarily associated with the move to our corporate headquarters in Weston, Massachusetts. |
| |
d | Gain on deconsolidation of subsidiaries, net |
| |
e | Gain on partial sale of an equity method investment during Q1 2015. |
| |
f | Non-GAAP interest expense related to the debt discount and amortization of the deferred financing costs related to the Company's convertible notes due 2019. |
| |
g | Non-GAAP adjustment includes tax provision for gain on deconsolidation of subsidiaries, net during Q1 2014. |
| |
h | Beginning in Q1 2015, the Non-GAAP income tax provision is calculated using a fixed long-term projected Non-GAAP tax rate of 35% as applied to Non-GAAP pre-tax income. Prior to Q1 2015, the Non-GAAP income tax adjustment was calculated using the effective rate of the reporting period, as adjusted for the effects of certain non-deductible stock based compensation and provisions for tax valuation allowances. |
| |
i | Discontinued operations related to the sale of our remaining interest in JobKorea. |
| |
j | Non-GAAP adjustment includes the impact, based on the average share price for the period, of the Company's outstanding capped call transactions, which are anti-dilutive in GAAP earnings per share but are expected to mitigate the dilutive effect of the Company's convertible notes due 2019. |
| |
k | Non-GAAP adjustment includes the dilutive impact of the Company's non-vested stock under employee compensation plans as anti-dilutive on a GAAP basis. |
MONSTER WORLDWIDE, INC.
UNAUDITED NON-GAAP OPERATING SEGMENT INFORMATION
(in thousands)
|
| | | | | | | | | | | | | | | |
Three Months Ended September 30, 2015 | Careers - North America | | Careers - International | | Corporate Expenses | | Total |
Revenue | $ | 119,449 |
| | $ | 47,633 |
| | | | $ | 167,082 |
|
Operating income (loss) - GAAP | $ | 25,739 |
| | $ | (8,581 | ) | | $ | (6,325 | ) | | $ | 10,833 |
|
Non GAAP Adjustments | 2,086 |
| | 3,007 |
| | 1,055 |
| | 6,148 |
|
Operating income (loss) - Non GAAP | $ | 27,825 |
| | $ | (5,574 | ) | | $ | (5,270 | ) | | $ | 16,981 |
|
EBITDA | $ | 34,221 |
| | $ | (3,934 | ) | | $ | (5,000 | ) | | $ | 25,287 |
|
Non GAAP Adjustments | 753 |
| | 2,035 |
| | (8 | ) | | 2,780 |
|
Adjusted EBITDA | $ | 34,974 |
| | $ | (1,899 | ) | | $ | (5,008 | ) | | $ | 28,067 |
|
Operating margin - GAAP | 21.5 | % | | (18.0 | )% | | | | 6.5 | % |
Operating margin - Non GAAP | 23.3 | % | | (11.7 | )% | | | | 10.2 | % |
EBITDA margin | 28.6 | % | | (8.3 | )% | | | | 15.1 | % |
Adjusted EBITDA margin | 29.3 | % | | (4.0 | )% | | | | 16.8 | % |
Three Months Ended September 30, 2014 | Careers - North America | | Careers - International | | Corporate Expenses | | Total |
Revenue | $ | 124,757 |
| | $ | 54,834 |
| | | | $ | 179,591 |
|
Operating income (loss) - GAAP | $ | 21,752 |
| | $ | (10,857 | ) | | $ | (10,863 | ) | | $ | 32 |
|
Non GAAP Adjustments | 2,865 |
| | 1,925 |
| | 2,702 |
| | 7,492 |
|
Operating income (loss) - Non GAAP | $ | 24,617 |
| | $ | (8,932 | ) | | $ | (8,161 | ) | | $ | 7,524 |
|
EBITDA | $ | 30,974 |
| | $ | (4,647 | ) | | $ | (7,824 | ) | | $ | 18,503 |
|
Non GAAP Adjustments | 570 |
| | 310 |
| | — |
| | 880 |
|
Adjusted EBITDA | $ | 31,544 |
| | $ | (4,337 | ) | | $ | (7,824 | ) | | $ | 19,383 |
|
Operating margin - GAAP | 17.4 | % | | (19.8 | )% | | | | — | % |
Operating margin - Non GAAP | 19.7 | % | | (16.3 | )% | | | | 4.2 | % |
EBITDA margin | 24.8 | % | | (8.5 | )% | | | | 10.3 | % |
Adjusted EBITDA margin | 25.3 | % | | (7.9 | )% | | | | 10.8 | % |
|
| | | | | | | | | | | | | | | |
Nine Months Ended September 30, 2015 | Careers - North America | | Careers - International | | Corporate Expenses | | Total |
Revenue | $ | 361,685 |
| | $ | 146,009 |
| | | | $ | 507,694 |
|
Operating income (loss) - GAAP | $ | 64,324 |
| | $ | (34,464 | ) | | $ | (27,974 | ) | | $ | 1,886 |
|
Non GAAP Adjustments | 16,418 |
| | 17,509 |
| | 8,245 |
| | 42,172 |
|
Operating income (loss) - Non GAAP | $ | 80,742 |
| | $ | (16,955 | ) | | $ | (19,729 | ) | | $ | 44,058 |
|
EBITDA | $ | 94,579 |
| | $ | (20,519 | ) | | $ | (22,877 | ) | | $ | 51,183 |
|
Non GAAP Adjustments | 8,113 |
| | 14,329 |
| | 4,119 |
| | 26,561 |
|
Adjusted EBITDA | $ | 102,692 |
| | $ | (6,190 | ) | | $ | (18,758 | ) | | $ | 77,744 |
|
Operating margin - GAAP | 17.8 | % | | (23.6 | )% | | | | 0.4 | % |
Operating margin - Non GAAP | 22.3 | % | | (11.6 | )% | | | | 8.7 | % |
EBITDA margin | 26.1 | % | | (14.1 | )% | | | | 10.1 | % |
Adjusted EBITDA margin | 28.4 | % | | (4.2 | )% | | | | 15.3 | % |
Nine Months Ended September 30, 2014 | Careers - North America | | Careers - International | | Corporate Expenses | | Total |
Revenue | $ | 378,463 |
| | $ | 171,794 |
| | | | $ | 550,257 |
|
Operating income (loss) - GAAP | $ | 58,929 |
| | $ | (29,710 | ) | | $ | (31,534 | ) | | $ | (2,315 | ) |
Non GAAP Adjustments | 12,591 |
| | 6,246 |
| | 11,940 |
| | 30,777 |
|
Operating income (loss) - Non GAAP | $ | 71,520 |
| | $ | (23,464 | ) | | $ | (19,594 | ) | | $ | 28,462 |
|
EBITDA | $ | 88,697 |
| | $ | (10,357 | ) | | $ | (21,565 | ) | | $ | 56,775 |
|
Non GAAP Adjustments | 3,871 |
| | 525 |
| | 2,833 |
| | 7,229 |
|
Adjusted EBITDA | $ | 92,568 |
| | $ | (9,832 | ) | | $ | (18,732 | ) | | $ | 64,004 |
|
Operating margin - GAAP | 15.6 | % | | (17.3 | )% | | | | (0.4 | )% |
Operating margin - Non GAAP | 18.9 | % | | (13.7 | )% | | | | 5.2 | % |
EBITDA margin | 23.4 | % | | (6.0 | )% | | | | 10.3 | % |
Adjusted EBITDA margin | 24.5 | % | | (5.7 | )% | | | | 11.6 | % |
Exhibit 99.2
FINANCIAL SUPPLEMENT
September 30, 2015
Monster Worldwide, Inc. (together with its consolidated subsidiaries, the “Company,” “Monster,” “we,” “our” or “us”) provides this supplement to assist investors in evaluating the Company’s financial and operating metrics. We suggest that the notes to this supplement be read in conjunction with the financial tables. The financial information included in this supplement contains certain non-GAAP financial measures. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles (“GAAP”), but are not a substitute for, or superior to, GAAP results. The non-GAAP measures included in this supplement have been reconciled to the most comparable GAAP measure. The Company intends to update the financial supplement on a quarterly basis.
Notes to Financial Supplement
Presentation
Stock-based compensation
Non-cash, stock-based compensation expense has been excluded from our non-GAAP financial statements for all periods presented.
Reallocate to Accelerate
On February 10, 2015, the Company committed to take a series of cost savings initiatives to reduce costs globally while continuing to support the Company’s new strategy. The initiatives include a global workforce reduction of approximately 300 associates, lease exit costs, impairment of certain assets, and office and general expense controls. The Company has incurred $2.8 million and $28.8 million of charges relating to this program during the three and nine months ended September 30, 2015, respectively. These charges have been excluded from our non-GAAP financial statements for the respective periods. The Company anticipates additional charges of approximately $1 million to $2 million in the remainder of 2015 in connection with this program.
Separation costs
During the second quarter of 2015, the Company incurred $2.0 million of separation charges related to the resignation of the Company’s former Chief Executive Officer and President, Salvatore Iannuzzi, effective November 4, 2014. These charges have been excluded from our non-GAAP financial statements for the nine months ended September 30, 2015.
Facilities costs
During the three and nine months ended September 30, 2014, the Company incurred $0.9 million and $7.2 million of charges associated with exited facilities, respectively, which have been excluded from our non-GAAP financial statements for the respective periods. The majority of these charges related to facility charges associated with the consolidation of multiple offices into the Company’s corporate headquarters in Weston, Massachusetts.
Gain on deconsolidation of subsidiaries, net
Prior to January 3, 2014, the Company had a 25% equity investment in a company located in Finland related to a business combination completed in 2001, with the remaining 75% held by Alma Media Corporation (“Alma Media”). Alma Media is a leading media company based in Finland, focused on digital services and publishing in Finland, the Nordic countries, the Baltics and Central Europe. Effective January 3, 2014, the Company expanded its relationship with Alma Media. Monster and Alma Media each contributed several additional entities and businesses into the existing joint venture and formed a significantly larger joint venture where Monster has an equity ownership of 15% with the opportunity to increase ownership up to 20%. The Company also contributed cash of approximately $6.5 million. Following closing, Monster no longer held a controlling interest in its subsidiaries in Poland, Hungary and the Czech Republic and therefore deconsolidated those subsidiaries effective January 3, 2014. The Company accounts for its investment under the equity method of accounting due to the Company’s ability to exert significant influence over the financial and operating policies of the new joint venture, primarily through our representation on the board of directors.
The Company recorded a gain of approximately $14.0 million as a result of the deconsolidation. The gain was measured as the difference between the (a) net fair value of the retained noncontrolling investment and the consideration transferred and (b) the carrying value of the contributed subsidiaries’ net assets of approximately $4.2 million. The fair value of the retained noncontrolling investment was approximately $24.8 million which was determined based on the present value of estimated future cash flows. The Company also recognized $1.8 million of accumulated unrealized currency translation loss related to the net assets of the subsidiaries contributed by Monster.
As a result of the deconsolidation, the Company recorded a net gain of approximately $11.8 million during the first quarter of 2014 which has been excluded from our non-GAAP financial statements for the nine months ended September 30, 2014.
Gain on partial sale of equity method investment
In 2008, the Company acquired a 50% equity interest in a company located in Australia, CareerOne Pty Limited (“CareerOne”). On March 31, 2015, the Company sold the majority of its 50% equity interest in CareerOne in an arms-length transaction, leaving the Company with a 10% interest. Total cash received from the transaction was $9.1 million, and the sale resulted in the recognition of a pre-tax gain of $8.8 million in the first quarter of 2015. This gain has been excluded from our non-GAAP financial statements for the nine months ended September 30, 2015. As a result of the sale, the Company no longer has the ability to exercise significant influence over CareerOne. Therefore, effective March 31, 2015, the remaining 10% interest retained by the Company is being accounted for under the cost method.
3.50% convertible senior notes due 2019
On October 22, 2014, the Company consummated an offering of $143.8 million aggregate principal amount of its 3.50% convertible senior notes due 2019 (the “Notes”), which includes $18.8 million in aggregate principal amount of Notes sold pursuant to the over-allotment option that was previously granted to the initial purchasers of the Notes and exercised by the initial purchasers on October 21, 2014. The Company received net proceeds of $139.0 million from the sale of the Notes, after deducting fees and expenses of $4.7 million. The Notes are unsecured, senior obligations of Monster, that bear interest at a rate of 3.50% per annum, payable in arrears on April 15 and October 15 of each year to holders of record at the close of business on the preceding April 1 and October 1, respectively. The Notes will mature on October 15, 2019, unless converted or repurchased in accordance with their terms prior to such date.
In connection with the offering of the Notes, Monster entered into capped call transactions with an affiliate of one of the initial purchasers. The Company used $16.5 million of the net proceeds to pay for the cost of the capped call transactions, $82.5 million to repay in full a term loan outstanding as of the date of issuance, and $40.0 million to repay a portion of the loans outstanding under the Company’s revolving credit facility.
In accordance with ASC 470-20, Debt with Conversion and Other Options, the Notes were separated into debt and equity components and assigned a fair value. The value assigned to the debt component was the estimated fair value, as of the issuance date, of similar debt without the conversion feature. The difference between the cash proceeds and this estimated fair value represents the value which was assigned to the equity component and was recorded as a debt discount. The debt discount is being amortized using the effective interest method from the date of issuance through the October 15, 2019 maturity date.
The initial debt component of the Notes was valued at $122.8 million, based on the contractual cash flows discounted at an appropriate market rate for non-convertible debt at the date of issuance. The carrying value of the permanent equity component reported in additional paid-in-capital was initially valued at $20.2 million, which is net of $0.7 million of fees and expenses allocated to the equity component.
The Company recognized $1.1 million and $3.2 million of amortization of the debt discount during the three and nine months ended September 30, 2015, respectively. The Company recognized $0.2 million and $0.6 million of amortization of deferred financing fees relating to the Notes during the three and nine months ended September 30, 2015, respectively. These charges have been excluded from our non-GAAP financial statements for the respective periods.
Income tax
Effective the first quarter of 2015, the Company has begun to utilize a fixed long-term projected non-GAAP tax rate for reporting operating results and for planning, forecasting, and analyzing future periods. This change provides better consistency across the interim reporting periods by eliminating the effects of non-recurring and period-specific items. The non-GAAP tax rate is 35%. See the detailed discussion in the “Non-GAAP financial measures” section below.
As a result of the gain related to the deconsolidation of our subsidiaries in Poland, Hungary and the Czech Republic, the Company recognized a tax provision of $5.5 million in the first quarter of 2014 which has been excluded from our non-GAAP financial statements for the nine months ended September 30, 2014.
Discontinued operations
In December 2013, H&Q Korea acquired 49.99% of JobKorea Ltd. (“JobKorea”), the Company’s wholly owned subsidiary in South Korea, from Monster and since that time the two companies have worked in partnership in managing the business. On September 28, 2015, the Company entered into an agreement to sell its 50.01% ownership position in JobKorea to H&Q Korea for KRW 101 billion, or approximately $85.0 million. The transaction closed on October 13, 2015, and is consistent with Monster’s continued strategy of unlocking value and sharpening its focus on the Company’s core online recruitment platform. The Company is in the process of evaluating the accounting for this transaction, and expects to record a gain related to the sale in the fourth quarter of 2015.
Operating results for JobKorea, which had previously been reported in the Careers-International segment and included in the Company’s consolidated statement of operations, have now been reclassified as discontinued operations for all periods presented. Additionally, the Company recorded allocated corporate tax and direct costs associated with the sale of JobKorea to discontinued operations for all periods presented. Accordingly, the Company recorded income from discontinued operations, net of tax, of $2.2 million and $6.0 million in the three and nine months ended September 30, 2015, respectively, and $2.3 million and $6.9 million in the three and nine months ended September 30, 2014, respectively. These charges have been excluded from our non-GAAP financial statements for the respective periods.
Reclassifications
Certain reclassifications of prior year amounts have been made for consistent presentation.
Non-GAAP financial measures
The Company has provided certain non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or an alternative for, generally accepted accounting principles (“GAAP”) and may be different from non-GAAP measures reported by other companies. The Company believes that its presentation of non-GAAP measures provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations.
Non-GAAP revenue, operating expenses, operating income, operating margin, income from continuing operations, income from discontinued operations, net of tax, net income, and diluted earnings per share attributable to Monster Worldwide, Inc. all exclude certain pro-forma items including: non-cash stock based compensation expense; costs incurred in connection with the Company’s restructuring programs; separation charges associated with the resignation of the Company’s former Chief Executive Officer; non-cash impairment charges; amortization of the debt discount and deferred financing costs associated with our 3.50% convertible senior notes due 2019; write-off of deferred financing costs relating to our former credit facility, amended in October 2014; income tax benefits associated with the reversal of income tax reserves on uncertain tax positions and a tax benefit related to certain losses arising from the Company’s restructuring programs; income tax provisions for increased valuation allowances on deferred tax assets; gain on deconsolidation of subsidiaries and tax provisions thereon; gain on partial sale of an equity method investment and tax provisions thereon; the results of our South Korean subsidiary as it has been classified as discontinued operations; and charges related to exited facilities.
In the first quarter of the calendar year 2015, the Company began to utilize a fixed long-term projected non-GAAP tax rate for reporting operating results and for planning, forecasting, and analyzing future periods. This change provides better consistency across the interim reporting periods by eliminating the effects of non-recurring and period-specific items. When projecting this long-term rate, the Company evaluated a five-year financial projection comprising the current and the next four years that exclude the income tax effects of the non-GAAP pre-tax items described above, eliminates the effects of non-recurring and period specific items which can vary in size and frequency, and is reflective of the anticipated future geographic mix of income among tax jurisdictions. The projected rate also assumes no new acquisitions or disposals in the five-year period, eliminates the effect of tax valuation allowances, and takes into account other factors including the Company’s current tax structure, its existing tax positions in various jurisdictions and key legislation in major jurisdictions where the Company operates. The non-GAAP tax rate is 35%. The Company intends to re-evaluate this long-term rate on an annual basis or if any significant events that may materially affect this long-term rate occur. This long-term rate could be subject to change for a variety of reasons, which may include (but are not limited to) for example, significant changes in the geographic earnings mix including future acquisition or disposition activity, having less income than anticipated, or fundamental tax law changes in major jurisdictions where the Company operates.
Non-GAAP diluted shares includes the impact, based on the average share price for the period, of the Company’s outstanding capped call transactions, which are anti-dilutive in GAAP earnings per share, but are expected to mitigate the dilutive effect of the Company’s 3.50% convertible senior notes due 2019.
The Company uses these non-GAAP measures for reviewing the ongoing results of the Company’s core business operations and in certain instances, for measuring performance under certain of the Company’s incentive compensation plans. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is defined as operating income or loss before depreciation and amortization, non-cash compensation expense, non-cash impairment charges, and non-cash costs incurred in connection with the Company’s restructuring programs. Adjusted EBITDA excludes the impact of the pro-forma items discussed above. The Company considers EBITDA and Adjusted EBITDA to be an important indicator of its operational strength which the Company believes are useful to management and investors in evaluating its operating performance. EBITDA and Adjusted EBITDA are non-GAAP measures and may not be comparable to similarly titled measures reported by other companies.
Free cash flow is defined as cash flows from operating activities less capital expenditures. Free cash flow is considered a liquidity measure and provides useful information about the Company’s ability to generate cash after investments in property and equipment. Free cash flow reflected herein is a non-GAAP measure and may not be comparable to similarly titled measures reported by other companies. Free cash flow does not reflect the total change in the Company’s cash position for the period and should not be considered a substitute for such a measure.
Net cash is defined as cash and cash equivalents plus short-term and long-term marketable securities, less total debt. Total available liquidity is defined as cash and cash equivalents, plus short-term and long-term marketable securities, plus unused borrowings under our credit facility. The Company considers net cash and total available liquidity to be important measures of liquidity and indicators of its ability to meet its ongoing obligations. The Company also uses net cash and total available liquidity, among other measures, in evaluating its choices for capital deployment. Net cash and securities and total available liquidity are presented herein as non-GAAP measures and may not be comparable to similarly titled measures used by other companies.
Monster Worldwide, Inc.
Statements of Operations
(unaudited, in thousands, except per share amounts)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trended Data |
Summary P&L Information | Q1 2014 | | Q2 2014 | | Q3 2014 | | Q4 2014 | | FY 2014 | | Q1 2015 | | Q2 2015 | | Q3 2015 |
Careers - North America | $ | 127,545 |
| | $ | 126,161 |
| | $ | 124,757 |
| | $ | 122,486 |
| | $ | 500,949 |
| | $ | 122,392 |
| | $ | 119,844 |
| | $ | 119,449 |
|
Careers - International | 60,081 |
| | 56,879 |
| | 54,834 |
| | 52,828 |
| | 224,622 |
| | 50,490 |
| | 47,886 |
| | 47,633 |
|
Revenue | 187,626 |
| | 183,040 |
| | 179,591 |
| | 175,314 |
| | 725,571 |
| | 172,882 |
|
| 167,730 |
| | 167,082 |
|
Salary and related | 89,442 |
| | 89,690 |
| | 89,188 |
| | 91,681 |
| | 360,001 |
| | 84,945 |
| | 81,750 |
| | 76,419 |
|
Office and general | 41,756 |
| | 36,381 |
| | 38,517 |
| | 37,471 |
| | 154,125 |
| | 33,304 |
| | 31,889 |
| | 32,552 |
|
Marketing and promotion | 39,629 |
| | 35,496 |
| | 33,383 |
| | 30,961 |
| | 139,469 |
| | 30,631 |
| | 30,416 |
| | 30,044 |
|
Restructuring and other special charges | — |
| | — |
| | — |
| | — |
| | — |
| | 20,092 |
| | 5,915 |
| | 2,780 |
|
Goodwill impairment | — |
| | — |
| | — |
| | 325,800 |
| | 325,800 |
| | — |
| | — |
| | — |
|
Depreciation expense | 11,613 |
| | 10,942 |
| | 11,277 |
| | 11,112 |
| | 44,944 |
| | 10,826 |
| | 10,442 |
| | 10,416 |
|
Stock-based compensation | 8,004 |
| | 8,932 |
| | 6,612 |
| | 11,366 |
| | 34,914 |
| | 4,405 |
| | 3,613 |
| | 3,368 |
|
Amortization of intangibles | 562 |
| | 566 |
| | 582 |
| | 663 |
| | 2,373 |
| | 664 |
| | 667 |
| | 670 |
|
Operating expenses | 191,006 |
| | 182,007 |
| | 179,559 |
| | 509,054 |
| | 1,061,626 |
| | 184,867 |
| | 164,692 |
| | 156,249 |
|
| | | | | | | | | | | | | | | |
Operating (loss) income | (3,380 | ) | | 1,033 |
| | 32 |
| | (333,740 | ) | | (336,055 | ) | | (11,985 | ) | | 3,038 |
| | 10,833 |
|
Gain on partial sale of equity method investment | — |
| | — |
| | — |
| | — |
| | — |
| | 8,849 |
| | — |
| | — |
|
Gain on deconsolidation of subsidiaries, net | 11,828 |
| | — |
| | — |
| | — |
| | 11,828 |
| | — |
| | — |
| | — |
|
Interest and other, net | (1,434 | ) | | (1,759 | ) | | (1,930 | ) | | (3,825 | ) | | (8,948 | ) | | (3,206 | ) | | (3,409 | ) | | (3,674 | ) |
Income (loss) before income taxes and equity interests | 7,014 |
| | (726 | ) | | (1,898 | ) | | (337,565 | ) | | (333,175 | ) | | (6,342 | ) | | (371 | ) | | 7,159 |
|
Provision for (benefit from) income taxes | 5,660 |
| | 414 |
| | 841 |
| | (46,697 | ) | | (39,782 | ) | | (13,945 | ) | | 1,819 |
| | (2,361 | ) |
(Loss) income in equity interests, net | (133 | ) | | 58 |
| | 75 |
| | (78 | ) | | (78 | ) | | (220 | ) | | 292 |
| | 249 |
|
Income (loss) from continuing operations | 1,221 |
| | (1,082 | ) | | (2,664 | ) | | (290,946 | ) | | (293,471 | ) | | 7,383 |
| | (1,898 | ) | | 9,769 |
|
Income from discontinued operations, net of tax | 2,018 |
| | 2,578 |
| | 2,313 |
| | 2,755 |
| | 9,664 |
| | 1,806 |
| | 2,036 |
| | 2,163 |
|
Net income (loss) | 3,239 |
| | 1,496 |
| | (351 | ) | | (288,191 | ) | | (283,807 | ) | | 9,189 |
| | 138 |
| | 11,932 |
|
Net income attributable to noncontrolling interest | (1,174 | ) | | (1,462 | ) | | (1,318 | ) | | (1,528 | ) | | (5,482 | ) | | (1,019 | ) | | (1,181 | ) | | (1,512 | ) |
Net income (loss) attributable to Monster Worldwide, Inc. | $ | 2,065 |
| | $ | 34 |
| | $ | (1,669 | ) | | $ | (289,719 | ) | | $ | (289,289 | ) | | $ | 8,170 |
| | $ | (1,043 | ) | | $ | 10,420 |
|
| | | | | | | | | | | | | | | |
*Basic earnings (loss) per share attributable to Monster Worldwide, Inc.: | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | $ | 0.01 |
| | $ | (0.01 | ) | | $ | (0.03 | ) | | $ | (3.33 | ) | | $ | (3.33 | ) | | $ | 0.08 |
| | $ | (0.02 | ) | | $ | 0.11 |
|
Income from discontinued operations, net of tax | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.05 |
| | 0.01 |
| | 0.01 |
| | 0.01 |
|
Basic earnings (loss) per share attributable to Monster Worldwide, Inc.: | $ | 0.02 |
| | $ | — |
| | $ | (0.02 | ) | | $ | (3.31 | ) | | $ | (3.29 | ) | | $ | 0.09 |
| | $ | (0.01 | ) | | $ | 0.12 |
|
| | | | | | | | | | | | | | | |
*Diluted earnings (loss) per share attributable to Monster Worldwide, Inc.: | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | $ | 0.01 |
| | $ | (0.01 | ) | | $ | (0.03 | ) | | $ | (3.33 | ) | | $ | (3.33 | ) | | $ | 0.08 |
| | $ | (0.02 | ) | | $ | 0.10 |
|
Income from discontinued operations, net of tax | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.01 |
| | 0.05 |
| | 0.01 |
| | 0.01 |
| | 0.01 |
|
Diluted earnings (loss) per share attributable to Monster Worldwide, Inc.: | $ | 0.02 |
| | $ | — |
| | $ | (0.02 | ) | | $ | (3.31 | ) | | $ | (3.29 | ) | | $ | 0.09 |
| | $ | (0.01 | ) | | $ | 0.11 |
|
| | | | | | | | | | | | | | | |
Weighted avg. shares outstanding: | | | | | | | | | | | | | | | |
Basic shares | 91,102 |
| | 87,080 |
| | 86,576 |
| | 87,478 |
| | 88,045 |
| | 89,137 |
| | 90,067 |
| | 90,340 |
|
Diluted shares | 94,416 |
| | 89,955 |
| | 86,576 |
| | 87,478 |
| | 88,045 |
| | 91,474 |
| | 90,067 |
| | 96,839 |
|
| | | | | | | | | | | | | | | |
Global employees - continuing operations (ones) | 3,837 |
| | 3,845 |
| | 3,835 |
| | 3,860 |
| | 3,860 |
| | 3,649 |
| | 3,654 |
| | 3,667 |
|
Annualized revenue per average employee | $ | 197.4 |
| | $ | 190.6 |
| | $ | 187.1 |
| | $ | 182.3 |
| | $ | 189.3 |
| | $ | 184.2 |
| | $ | 183.7 |
| | $ | 182.6 |
|
*Earnings per share may not add in certain periods due to rounding.
Monster Worldwide, Inc.
Non-GAAP Statements of Operations
(Unaudited, in thousands, except for per share amounts)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trended Data |
Summary P&L Information | Q1 2014 | | Q2 2014 | | Q3 2014 | | Q4 2014 | | FY 2014 | | Q1 2015 | | Q2 2015 | | Q3 2015 |
Careers - North America | $ | 127,545 |
| | $ | 126,161 |
| | $ | 124,757 |
| | $ | 122,486 |
| | $ | 500,949 |
| | $ | 122,392 |
| | $ | 119,844 |
| | $ | 119,449 |
|
Careers - International | 60,081 |
| | 56,879 |
| | 54,834 |
| | 52,828 |
| | 224,622 |
| | 50,490 |
| | 47,886 |
| | 47,633 |
|
Revenue | 187,626 |
| | 183,040 |
| | 179,591 |
| | 175,314 |
| | 725,571 |
| | 172,882 |
| | 167,730 |
| | 167,082 |
|
Salary and related | 89,442 |
| | 89,690 |
| | 89,188 |
| | 87,078 |
| | 355,398 |
| | 84,945 |
| | 79,751 |
| | 76,419 |
|
Office and general | 35,407 |
| | 36,381 |
| | 37,637 |
| | 35,971 |
| | 145,396 |
| | 33,304 |
| | 31,889 |
| | 32,552 |
|
Marketing and promotion | 39,629 |
| | 35,496 |
| | 33,383 |
| | 30,961 |
| | 139,469 |
| | 30,631 |
| | 30,416 |
| | 30,044 |
|
Depreciation expense | 11,613 |
| | 10,942 |
| | 11,277 |
| | 11,112 |
| | 44,944 |
| | 10,826 |
| | 10,442 |
| | 10,416 |
|
Amortization of intangibles | 562 |
| | 566 |
| | 582 |
| | 663 |
| | 2,373 |
| | 664 |
| | 667 |
| | 670 |
|
Operating expenses | 176,653 |
| | 173,075 |
| | 172,067 |
| | 165,785 |
| | 687,580 |
| | 160,370 |
| | 153,165 |
| | 150,101 |
|
Operating income | 10,973 |
| | 9,965 |
| | 7,524 |
| | 9,529 |
| | 37,991 |
| | 12,512 |
| | 14,565 |
| | 16,981 |
|
Interest and other, net | (1,434 | ) | | (1,759 | ) | | (1,930 | ) | | (1,464 | ) | | (6,587 | ) | | (1,922 | ) | | (2,156 | ) | | (2,422 | ) |
Income before income taxes and equity interests | 9,539 |
| | 8,206 |
| | 5,594 |
| | 8,065 |
| | 31,404 |
| | 10,590 |
| | 12,409 |
| | 14,559 |
|
Provision for income taxes | 3,033 |
| | 2,524 |
| | 2,076 |
| | 3,046 |
| | 10,679 |
| | 3,707 |
| | 4,344 |
| | 5,111 |
|
(Loss) income in equity interests, net | (133 | ) | | 58 |
| | 75 |
| | (78 | ) | | (78 | ) | | (220 | ) | | 292 |
| | 249 |
|
Net income - continuing operations | $ | 6,373 |
| | $ | 5,740 |
| | $ | 3,593 |
| | $ | 4,941 |
| | $ | 20,647 |
| | $ | 6,663 |
| | $ | 8,357 |
| | $ | 9,697 |
|
*Diluted earnings per share attributable to Monster Worldwide, Inc.: | $ | 0.07 |
| | $ | 0.06 |
| | $ | 0.04 |
| | $ | 0.05 |
| | $ | 0.23 |
| | $ | 0.07 |
| | $ | 0.09 |
| | $ | 0.11 |
|
*JobKorea diluted earnings per share | 0.01 |
| | 0.02 |
| | 0.01 |
| | 0.02 |
| | 0.05 |
| | 0.01 |
| | 0.01 |
| | 0.01 |
|
*Diluted earnings per share attributable to Monster Worldwide, Inc. including JobKorea: | $ | 0.08 |
| | $ | 0.08 |
| | $ | 0.05 |
| | $ | 0.07 |
| | $ | 0.28 |
| | $ | 0.08 |
| | $ | 0.10 |
| | $ | 0.12 |
|
Weighted avg. shares outstanding: | | | | | | | | | | | | | | | |
Diluted shares | 94,416 |
| | 89,955 |
| | 89,317 |
| | 90,664 |
| | 91,091 |
| | 91,474 |
| | 90,874 |
| | 90,967 |
|
*Earnings per share may not add in certain periods due to rounding.
See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Segment Information and Margin Analysis - GAAP and Non-GAAP
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trended Data |
| Q1 2014 | | Q2 2014 | | Q3 2014 | | Q4 2014 | | FY 2014 | | Q1 2015 | | Q2 2015 | | Q3 2015 |
Segment Revenue: | | | | | | | | | | | | | | | |
Careers - North America | $ | 127,545 |
| | $ | 126,161 |
| | $ | 124,757 |
| | $ | 122,486 |
| | $ | 500,949 |
| | $ | 122,392 |
| | $ | 119,844 |
| | $ | 119,449 |
|
Careers - International | 60,081 |
| | 56,879 |
| | 54,834 |
| | 52,828 |
| | 224,622 |
| | 50,490 |
| | 47,886 |
| | 47,633 |
|
Total revenue | $ | 187,626 |
| | $ | 183,040 |
| | $ | 179,591 |
| | $ | 175,314 |
| | $ | 725,571 |
| | $ | 172,882 |
| | $ | 167,730 |
| | $ | 167,082 |
|
JobKorea revenue | 10,523 |
| | 11,401 |
| | 11,629 |
| | 10,889 |
| | 44,442 |
| | 10,811 |
| | 12,684 |
| | 12,165 |
|
Total revenue including JobKorea | $ | 198,149 |
| | $ | 194,441 |
| | $ | 191,220 |
| | $ | 186,203 |
| | $ | 770,013 |
| | $ | 183,693 |
| | $ | 180,414 |
| | $ | 179,247 |
|
Segment operating income (loss): GAAP | | | | | | | | | | | | | | | |
Careers - North America | $ | 15,811 |
| | $ | 21,366 |
| | $ | 21,752 |
| | $ | (305,847 | ) | | $ | (246,918 | ) | | $ | 13,338 |
| | $ | 25,247 |
| | $ | 25,739 |
|
Careers - International | (8,199 | ) | | (10,654 | ) | | (10,857 | ) | | (9,178 | ) | | (38,888 | ) | | (15,425 | ) | | (10,458 | ) | | (8,581 | ) |
Total operating income (loss) GAAP | $ | 7,612 |
| | $ | 10,712 |
| | $ | 10,895 |
| | $ | (315,025 | ) | | $ | (285,806 | ) | | $ | (2,087 | ) | | $ | 14,789 |
| | $ | 17,158 |
|
Corporate expenses GAAP | (10,992 | ) | | (9,679 | ) | | (10,863 | ) | | (18,715 | ) | | (50,249 | ) | | (9,898 | ) | | (11,751 | ) | | (6,325 | ) |
Total operating (loss) income GAAP | $ | (3,380 | ) | | $ | 1,033 |
| | $ | 32 |
| | $ | (333,740 | ) | | $ | (336,055 | ) | | $ | (11,985 | ) | | $ | 3,038 |
| | $ | 10,833 |
|
Segment operating income (loss): Non-GAAP(1) | | | | | | | | | | | | | | | |
Careers - North America | $ | 21,923 |
| | $ | 24,980 |
| | $ | 24,617 |
| | $ | 23,921 |
| | $ | 95,441 |
| | $ | 25,846 |
| | $ | 27,071 |
| | $ | 27,825 |
|
Careers - International | (6,209 | ) | | (8,323 | ) | | (8,932 | ) | | (7,183 | ) | | (30,647 | ) | | (5,817 | ) | | (5,564 | ) | | (5,574 | ) |
Total operating income Non-GAAP | $ | 15,714 |
| | $ | 16,657 |
| | $ | 15,685 |
| | $ | 16,738 |
| | $ | 64,794 |
| | $ | 20,029 |
| | $ | 21,507 |
| | $ | 22,251 |
|
Corporate expenses Non-GAAP | (4,741 | ) | | (6,692 | ) | | (8,161 | ) | | (7,206 | ) | | (26,800 | ) | | (7,517 | ) | | (6,942 | ) | | (5,270 | ) |
Total operating income Non-GAAP | $ | 10,973 |
| | $ | 9,965 |
| | $ | 7,524 |
| | $ | 9,532 |
| | $ | 37,994 |
| | $ | 12,512 |
| | $ | 14,565 |
| | $ | 16,981 |
|
(1) - See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Reconciliation of Operating Income (Loss) to EBITDA and Adjusted EBITDA
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trended Data |
Summary P&L Information | Q1 2014 | | Q2 2014 | | Q3 2014 | | Q4 2014 | | FY 2014 | | Q1 2015 | | Q2 2015 | | Q3 2015 |
Revenue | $ | 187,626 |
| | $ | 183,040 |
| | $ | 179,591 |
| | $ | 175,314 |
| | $ | 725,571 |
| | $ | 172,882 |
| | $ | 167,730 |
| | $ | 167,082 |
|
Operating (loss) income - GAAP | $ | (3,380 | ) | | $ | 1,033 |
| | $ | 32 |
| | $ | (333,740 | ) | | $ | (336,055 | ) | | $ | (11,985 | ) | | $ | 3,038 |
| | $ | 10,833 |
|
Depreciation expense | 11,613 |
| | 10,942 |
| | 11,277 |
| | 11,112 |
| | 44,944 |
| | 10,826 |
| | 10,442 |
| | 10,416 |
|
Stock-based compensation | 8,004 |
| | 8,932 |
| | 6,612 |
| | 11,366 |
| | 34,914 |
| | 4,405 |
| | 3,613 |
| | 3,368 |
|
Goodwill impairment | — |
| | — |
| | — |
| | 325,800 |
| | 325,800 |
| | — |
| | — |
| | — |
|
Restructuring non-cash charges and other | — |
| | — |
| | — |
| | 1,000 |
| | 1,000 |
| | 4,226 |
| | — |
| | — |
|
Amortization of intangibles | 562 |
| | 566 |
| | 582 |
| | 663 |
| | 2,373 |
| | 664 |
| | 667 |
| | 670 |
|
EBITDA (1) | $ | 16,799 |
| | $ | 21,473 |
| | $ | 18,503 |
| | $ | 16,201 |
| | $ | 72,976 |
| | $ | 8,136 |
| | $ | 17,760 |
| | $ | 25,287 |
|
Separation charges | — |
| | — |
| | — |
| | 4,603 |
| | 4,603 |
| | — |
| | 2,000 |
| | — |
|
Facilities costs | 6,349 |
| | — |
| | 880 |
| | 500 |
| | 7,729 |
| | — |
| | — |
| | — |
|
Restructuring expenses, less non-cash items | — |
| | — |
| | — |
| | — |
| | — |
| | 15,866 |
| | 5,915 |
| | 2,780 |
|
Total non-GAAP Adjustments | 6,349 |
| | — |
| | 880 |
| | 5,103 |
| | 12,332 |
| | 15,866 |
| | 7,915 |
| | 2,780 |
|
Adjusted EBITDA (1) | $ | 23,148 |
| | $ | 21,473 |
| | $ | 19,383 |
| | $ | 21,304 |
| | $ | 85,308 |
| | $ | 24,002 |
| | $ | 25,675 |
| | $ | 28,067 |
|
JobKorea adjusted EBITDA | $ | 3,423 |
| | $ | 4,138 |
| | $ | 3,711 |
| | $ | 4,627 |
| | $ | 15,899 |
| | $ | 3,014 |
| | $ | 3,370 |
| | $ | 4,335 |
|
Adjusted EBITDA including JobKorea | $ | 26,571 |
| | $ | 25,611 |
| | $ | 23,094 |
| | $ | 25,931 |
| | $ | 101,207 |
| | $ | 27,016 |
| | $ | 29,045 |
| | $ | 32,402 |
|
(1) - See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Statements of Cash Flows
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trended Data |
| Q1 2014 | | Q2 2014 | | Q3 2014 | | Q4 2014 | | FY 2014 | | Q1 2015 | | Q2 2015 | | Q3 2015 |
Cash flows provided by operating activities: | | | | | | | | | | | | | | | |
Net income (loss) | $ | 3,239 |
| | $ | 1,496 |
| | $ | (351 | ) | | $ | (288,191 | ) | | $ | (283,807 | ) | | $ | 9,189 |
| | $ | 138 |
| | $ | 11,932 |
|
Adjustments to reconcile net income (loss) to cash provided by operating activities: | | | | | | | | | | | | | | | |
Depreciation and amortization | 12,519 |
| | 11,835 |
| | 12,194 |
| | 12,095 |
| | 48,643 |
| | 11,807 |
| | 11,430 |
| | 11,388 |
|
Provision for doubtful accounts | 316 |
| | 412 |
| | 562 |
| | 417 |
| | 1,707 |
| | 323 |
| | 438 |
| | 478 |
|
Stock-based compensation | 8,173 |
| | 9,063 |
| | 6,682 |
| | 11,439 |
| | 35,357 |
| | 4,465 |
| | 3,626 |
| | 3,380 |
|
Deferred income taxes | 3,893 |
| | (491 | ) | | 53 |
| | (46,873 | ) | | (43,418 | ) | | 3,933 |
| | 772 |
| | (3,218 | ) |
Non-cash restructuring charges | — |
| | — |
| | — |
| | — |
| | — |
| | 4,226 |
| | — |
| | — |
|
Impairment of investment and indefinite live intangible | — |
| | — |
| | — |
| | 2,070 |
| | 2,070 |
| | — |
| | — |
| | — |
|
Goodwill impairment | — |
| | — |
| | — |
| | 325,000 |
| | 325,000 |
| | — |
| | — |
| | — |
|
Loss (income) in equity interests, net | 133 |
| | (58 | ) | | (75 | ) | | 78 |
| | 78 |
| | 220 |
| | (292 | ) | | (249 | ) |
Gain on deconsolidation of subsidiaries | (13,647 | ) | | — |
| | — |
| | — |
| | (13,647 | ) | | — |
| | — |
| | — |
|
Amount reclassified from accumulated other comprehensive income | 1,819 |
| | — |
| | — |
| | — |
| | 1,819 |
| | — |
| | — |
| | — |
|
Gain on partial sale of equity method investment | — |
| | — |
| | — |
| | — |
| | — |
| | (8,849 | ) | | — |
| | — |
|
Excess income tax benefit from equity compensation plans | (130 | ) | | (69 | ) | | — |
| | — |
| | (199 | ) | | — |
| | — |
| | — |
|
Changes in assets and liabilities, net of acquisitions: | | | | | | | | | | | | | | | |
Accounts receivable | 14,501 |
| | 25,023 |
| | 25,832 |
| | (24,789 | ) | | 40,567 |
| | (255 | ) | | 21,233 |
| | 19,260 |
|
Prepaid and other | (14,838 | ) | | 6,848 |
| | (2,855 | ) | | (863 | ) | | (11,708 | ) | | (4,298 | ) | | 8,419 |
| | 5,658 |
|
Deferred revenue | (964 | ) | | (26,525 | ) | | (29,483 | ) | | 24,256 |
| | (32,716 | ) | | 9,946 |
| | (24,127 | ) | | (24,936 | ) |
Accounts payable, accrued liabilities, and other | 3,893 |
| | (2,634 | ) | | (622 | ) | | 12,372 |
| | 13,009 |
| | (3,948 | ) | | (5,589 | ) | | (11,410 | ) |
Total adjustments | 15,668 |
| | 23,404 |
| | 12,288 |
| | 315,202 |
| | 366,562 |
| | 17,570 |
| | 15,910 |
| | 351 |
|
Net cash provided by operating activities | 18,907 |
| | 24,900 |
| | 11,937 |
| | 27,011 |
| | 82,755 |
| | 26,759 |
| | 16,048 |
| | 12,283 |
|
Cash flows (used for) provided by investing activities: | | | | | | | | | | | | | | | |
Capital expenditures | (10,700 | ) | | (11,769 | ) | | (8,287 | ) | | (9,087 | ) | | (39,843 | ) | | (7,945 | ) | | (6,790 | ) | | (6,869 | ) |
Payments for acquisitions, net of cash acquired | (27,005 | ) | | — |
| | — |
| | — |
| | (27,005 | ) | | — |
| | — |
| | — |
|
Investment in Alma Career Oy | (6,516 | ) | | — |
| | — |
| | — |
| | (6,516 | ) | | — |
| | — |
| | — |
|
Cash funded to equity investee and other | (729 | ) | | 113 |
| | (606 | ) | | (941 | ) | | (2,163 | ) | | 976 |
| | 672 |
| | — |
|
Capitalized patent defense costs | — |
| | (1,220 | ) | | (1,742 | ) | | (1,577 | ) | | (4,539 | ) | | (2,263 | ) | | (42 | ) | | — |
|
Cash received from partial sale of equity investment | — |
| | — |
| | — |
| | — |
| | — |
| | 9,128 |
| | — |
| | — |
|
Net cash used for investing activities | (44,950 | ) | | (12,876 | ) | | (10,635 | ) | | (11,605 | ) | | (80,066 | ) | | (104 | ) | | (6,160 | ) | | (6,869 | ) |
Cash flows provided by (used for) financing activities: | | | | | | | | | | | | | | | |
Proceeds from borrowings on credit facilities | 78,800 |
| | — |
| | 1,500 |
| | 66,100 |
| | 146,400 |
| | 31,600 |
| | 500 |
| | — |
|
Payments on borrowings on credit facilities | — |
| | (8,100 | ) | | — |
| | (184,200 | ) | | (192,300 | ) | | (31,600 | ) | | (500 | ) | | — |
|
Proceeds from borrowings on term loan | — |
| | — |
| | — |
| | 90,000 |
| | 90,000 |
| | — |
| | — |
| | — |
|
Payments on borrowings on term loan | (1,875 | ) | | (2,500 | ) | | (2,500 | ) | | (84,750 | ) | | (91,625 | ) | | (2,250 | ) | | (2,250 | ) | | (9,250 | ) |
Proceeds from convertible notes | — |
| | — |
| | — |
| | 143,750 |
| | 143,750 |
| | — |
| | — |
| | — |
|
Fees paid on the issuance of debt and purchase of capped call | — |
| | — |
| | — |
| | (23,111 | ) | | (23,111 | ) | | (997 | ) | | (113 | ) | | — |
|
Tax withholdings related to net share settlements of restricted stock awards and units | (1,427 | ) | | (2,280 | ) | | (1,307 | ) | | (5,551 | ) | | (10,565 | ) | | (5,494 | ) | | (1,306 | ) | | (1,239 | ) |
Repurchase of common stock | (39,653 | ) | | (11,864 | ) | | (553 | ) | | — |
| | (52,070 | ) | | — |
| | — |
| | — |
|
Excess income tax benefit from equity compensation plans | 130 |
| | 69 |
| | — |
| | — |
| | 199 |
| | — |
| | — |
| | — |
|
Distribution paid to noncontrolling interest | — |
| | (3,021 | ) | | — |
| | — |
| | (3,021 | ) | | — |
| | (10,018 | ) | | — |
|
Net cash provided by (used for) financing activities | 35,975 |
| | (27,696 | ) | | (2,860 | ) | | 2,238 |
| | 7,657 |
| | (8,741 | ) | | (13,687 | ) | | (10,489 | ) |
Effects of exchange rates on cash | 118 |
| | 1,436 |
| | (2,461 | ) | | (3,723 | ) | | (4,630 | ) | | (1,981 | ) | | 1,250 |
| | (2,683 | ) |
Net increase (decrease) in cash and cash equivalents | $ | 10,050 |
| | $ | (14,236 | ) | | $ | (4,019 | ) | | $ | 13,921 |
| | $ | 5,716 |
| | $ | 15,933 |
| | $ | (2,549 | ) | | $ | (7,758 | ) |
Cash and cash equivalents from continuing operations, beginning of period | $ | 70,066 |
| | $ | 78,151 |
| | $ | 66,472 |
| | $ | 61,399 |
| | $ | 70,066 |
| | $ | 72,030 |
| | $ | 84,537 |
| | $ | 99,415 |
|
Cash and cash equivalents from discontinued operations, beginning of period | 18,515 |
| | 20,480 |
| | 17,923 |
| | 18,977 |
| | 18,515 |
| | 22,267 |
| | 25,693 |
| | 8,266 |
|
Cash and cash equivalents, beginning of period | $ | 88,581 |
| | $ | 98,631 |
| | $ | 84,395 |
| | $ | 80,376 |
| | $ | 88,581 |
| | $ | 94,297 |
| | $ | 110,230 |
| | $ | 107,681 |
|
Cash and cash equivalents from continuing operations, end of period | $ | 78,151 |
| | $ | 66,472 |
| | $ | 61,399 |
| | $ | 72,030 |
| | $ | 72,030 |
| | $ | 84,537 |
| | $ | 99,415 |
| | $ | 88,389 |
|
Cash and cash equivalents from discontinued operations, end of period | 20,480 |
| | 17,923 |
| | 18,977 |
| | 22,267 |
| | 22,267 |
| | 25,693 |
| | 8,266 |
| | 11,534 |
|
Cash and cash equivalents, end of period | $ | 98,631 |
| | $ | 84,395 |
|
| $ | 80,376 |
| | $ | 94,297 |
| | $ | 94,297 |
| | $ | 110,230 |
| | $ | 107,681 |
| | $ | 99,923 |
|
Monster Worldwide, Inc.
Statements of Cash Flows, continued
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trended Data |
| Q1 2014 | | Q2 2014 | | Q3 2014 | | Q4 2014 | | FY 2014 | | Q1 2015 | | Q2 2015 | | Q3 2015 |
Free cash flow (1): | | | | | | | | | | | | | | | |
Net cash provided by operating activities of continuing operations | $ | 16,643 |
| | $ | 21,760 |
| | $ | 10,289 |
| | $ | 22,216 |
| | $ | 70,908 |
| | $ | 23,345 |
| | $ | 13,228 |
| | $ | 8,370 |
|
Net cash provided by operating activities of discontinued operations | 2,264 |
| | 3,140 |
| | 1,648 |
| | 4,795 |
| | 11,847 |
| | 3,414 |
| | 2,820 |
| | 3,913 |
|
Less: Capital expenditures | (10,700 | ) | | (11,769 | ) | | (8,287 | ) | | (9,087 | ) | | (39,843 | ) | | (7,945 | ) | | (6,790 | ) | | (6,869 | ) |
Free cash flow | $ | 8,207 |
| | $ | 13,131 |
| | $ | 3,650 |
| | $ | 17,924 |
| | $ | 42,912 |
| | $ | 18,814 |
| | $ | 9,258 |
| | $ | 5,414 |
|
(1) - See notes to financial supplement for further explanation of Non-GAAP measures.
Monster Worldwide, Inc.
Consolidated Condensed Balance Sheets
(unaudited, in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Trended Data |
| March 2014 | | June 2014 | | September 2014 | | December 2014 | | March 2015 | | June 2015 | | September 2015 |
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | $ | 78,151 |
| | $ | 66,472 |
| | $ | 61,399 |
| | $ | 72,030 |
| | $ | 84,537 |
| | $ | 99,415 |
| | $ | 88,389 |
|
Accounts receivable, net | 315,187 |
| | 290,187 |
| | 258,950 |
| | 279,569 |
| | 272,270 |
| | 252,802 |
| | 231,192 |
|
Prepaid and other | 91,718 |
| | 86,963 |
| | 86,373 |
| | 82,310 |
| | 63,491 |
| | 65,666 |
| | 59,858 |
|
Current assets held for sale | 24,907 |
| | 22,632 |
| | 23,441 |
| | 26,237 |
| | 32,256 |
| | 12,993 |
| | 56,772 |
|
Total current assets | 509,963 |
| | 466,254 |
| | 430,163 |
| | 460,146 |
| | 452,554 |
| | 430,876 |
| | 436,211 |
|
Property and equipment, net | 123,310 |
| | 123,477 |
| | 118,751 |
| | 117,191 |
| | 114,788 |
| | 112,162 |
| | 107,288 |
|
Goodwill | 856,504 |
| | 854,432 |
| | 841,281 |
| | 501,026 |
| | 498,282 |
| | 498,823 |
| | 497,345 |
|
Intangibles, net | 27,399 |
| | 28,776 |
| | 30,983 |
| | 30,169 |
| | 29,518 |
| | 29,084 |
| | 28,505 |
|
Investment in unconsolidated affiliates | 24,584 |
| | 23,759 |
| | 22,690 |
| | 20,700 |
| | 18,832 |
| | 19,082 |
| | 18,955 |
|
Other assets | 32,907 |
| | 33,902 |
| | 34,694 |
| | 43,138 |
| | 46,929 |
| | 39,489 |
| | 43,912 |
|
Long-term held for sale | 68,129 |
| | 66,665 |
| | 56,304 |
| | 44,781 |
| | 42,562 |
| | 42,803 |
| | — |
|
Total assets | $ | 1,642,796 |
| | $ | 1,597,265 |
| | $ | 1,534,866 |
| | $ | 1,217,151 |
| | $ | 1,203,465 |
| | $ | 1,172,319 |
| | $ | 1,132,216 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable, accrued expenses and other | $ | 153,859 |
| | $ | 154,210 |
| | $ | 148,148 |
| | $ | 154,103 |
| | $ | 152,631 |
| | $ | 151,076 |
| | $ | 140,136 |
|
Deferred revenue | 338,685 |
| | 312,483 |
| | 278,293 |
| | 297,636 |
| | 300,015 |
| | 277,912 |
| | 251,065 |
|
Current portion of long-term debt | 212,200 |
| | 201,600 |
| | 10,000 |
| | 9,563 |
| | 10,125 |
| | 10,688 |
| | 10,278 |
|
Current liabilities held for sale | 15,673 |
| | 9,706 |
| | 7,941 |
| | 8,012 |
| | 11,710 |
| | 10,034 |
| | 10,100 |
|
Total current liabilities | 720,417 |
| | 677,999 |
| | 444,382 |
| | 469,314 |
| | 474,481 |
| | 449,710 |
| | 411,579 |
|
Long-term income taxes payable | 54,451 |
| | 55,355 |
| | 56,465 |
| | 54,636 |
| | 37,550 |
| | 37,652 |
| | 35,561 |
|
Long-term debt, net, less current portion | — |
| | — |
| | 190,600 |
| | 201,821 |
| | 200,055 |
| | 198,289 |
| | 190,494 |
|
Other liabilities | 53,527 |
| | 57,146 |
| | 59,219 |
| | 16,635 |
| | 18,125 |
| | 17,581 |
| | 17,041 |
|
Total liabilities | 828,395 |
| | 790,500 |
| | 750,666 |
| | 742,406 |
| | 730,211 |
| | 703,232 |
| | 654,675 |
|
Common stock and class B common stock | 142 |
| | 142 |
| | 143 |
| | 144 |
| | 146 |
| | 146 |
| | 147 |
|
Additional paid-in capital | 2,003,528 |
| | 2,009,119 |
| | 2,015,019 |
| | 2,023,640 |
| | 2,022,062 |
| | 2,024,842 |
| | 2,026,288 |
|
Accumulated other comprehensive income (loss) | 67,691 |
| | 61,916 |
| | 35,685 |
| | 9,245 |
| | (110 | ) | | 3,152 |
| | 1,440 |
|
Accumulated deficit | (562,806 | ) | | (562,772 | ) | | (564,441 | ) | | (854,160 | ) | | (845,990 | ) | | (847,033 | ) | | (836,613 | ) |
Treasury stock, at cost | (745,954 | ) | | (757,819 | ) | | (758,371 | ) | | (758,371 | ) | | (758,371 | ) | | (758,371 | ) | | (758,371 | ) |
Noncontrolling interest | 51,800 |
| | 56,179 |
| | 56,165 |
| | 54,247 |
| | 55,517 |
| | 46,351 |
| | 44,650 |
|
Total stockholders' equity | 814,401 |
| | 806,765 |
| | 784,200 |
| | 474,745 |
| | 473,254 |
| | 469,087 |
| | 477,541 |
|
Total liabilities and stockholders' equity | $ | 1,642,796 |
| | $ | 1,597,265 |
| | $ | 1,534,866 |
| | $ | 1,217,151 |
| | $ | 1,203,465 |
| | $ | 1,172,319 |
| | $ | 1,132,216 |
|
Memo(1) | | | | | | | | | | | | | |
Net cash including JobKorea | $ | (113,569 | ) | | $ | (117,205 | ) | | $ | (120,224 | ) | | $ | (117,088 | ) | | $ | (99,950 | ) | | $ | (101,296 | ) | | $ | (100,849 | ) |
Net cash JobKorea | 20,480 |
| | 17,923 |
| | 18,977 |
| | 22,267 |
| | 25,693 |
| | 8,266 |
| | 11,534 |
|
Net cash excluding JobKorea | $ | (134,049 | ) | | $ | (135,128 | ) | | $ | (139,201 | ) | | $ | (139,355 | ) | | $ | (125,643 | ) | | $ | (109,562 | ) | | $ | (112,383 | ) |
(1) See notes to financial supplement for definitions and calculations of selected financial metrics.
Monster Worldwide, Inc. (NYSE:MWW)
Historical Stock Chart
From Mar 2024 to Apr 2024
Monster Worldwide, Inc. (NYSE:MWW)
Historical Stock Chart
From Apr 2023 to Apr 2024
